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in a study released Wednesday by Denver-based Panorama Consulting Group.

But such disappointment is by no means unique to SAP and Oracle, according to Eric Kimberling, Panorama’s president and CEO. “This is not that far off the industry average,” Kimberling said, adding that he was nonetheless surprised to see sharp differences in benefits realization between the two vendors. When asked whether they received at least half the benefits they hoped for, 40% of Oracle users said yes, compared with 20% of SAP users.

“You can find good and bad in both of them,” Kimberling said. “The main thing is to understand their tradeoffs. You’re getting some advantage, but you’re also giving something up.”

More on selecting ERP software

Still, nearly three-quarters of users of both systems said they are satisfied, with Oracle leading slightly. “Either they set the bar really low or they have another level of satisfaction,” Kimberling said. “Maybe people’s jobs are easier, or they’re just happier they have a Tier 1 ERP now instead of an old legacy system.”

Slightly more SAP projects (39%) went over schedule than Oracle projects (35%), and SAP projects took nearly a month longer on average, at 13.8 months from time of purchase to becoming fully functional. Panorama suggested companies might have unrealistic expectations of how long an implementation should take. However, 33% of Oracle projects finished ahead of schedule -- twice as often as SAP -- and Oracle projects were twice as likely to finish right on time.

In contrast, the financial impact of SAP and Oracle projects showed little variation. “More than half of SAP and Oracle projects go over budget,” the report stated, with SAP doing slightly worse. Panorama also found that Oracle projects tend to have a slightly longer payback period, but both typically take several months longer than the ERP industry average of 2.7 years.

SAP spokesman Jim Dever said the company couldn’t draw clear inferences from the study without knowing how market segments and specific products played out in the comparison. “The findings of the study don’t necessarily agree with what we’re seeing on an ongoing basis,” Dever said, citing a Massachusetts Institute of Technology study that showed a correlation between ERP use and improvements in financial performance at hundreds of companies. He said SAP has a value engineering program specifically designed to help customers achieve the benefits they expect.

Oracle was contacted but did not provide a comment.

SAP vs. Oracle: Which is a better fit?

SAP’s combined offerings survived the initial cut and made the shortlists of 20% of companies. That led all vendors. Oracle E-Business Suite made 10% of shortlists, and Microsoft Dynamics was shortlisted 15% of the time, yet it dropped to seventh in actual purchases (at 23%). Oracle's PeopleSoft application had the highest percentage of actual purchases at 67%, with E-Business Suite and SAP following at 54%. Kimberling was reluctant to draw conclusions but said the results suggest Microsoft Dynamics has strong brand recognition that, for some reason, doesn’t translate into sales as often as competitors’ brand recognition does. For its part, Oracle is apparently succeeding at quelling fears about the viability of its acquired brands, including JD Edwards, which remains popular with manufacturers, he said.

Panorama later contacted clients who shortlisted SAP and Oracle and asked them to rate the functional fit of the ERP systems based on vendor demos that were customized for their business processes.

The ratings in most functions were close, but SAP’s make-to-order features scored substantially better, as did its warehouse and inventory, repair and returned goods, product development, and cash management. Panorama said additional “qualitative” feedback shows that SAP’s other functional strengths are quality control, visibility into goods-in-transit orders, integrated retail module, and regulatory compliance. SAP’s top-rated function was make-to-order, order-to-cash.

Oracle’s product configurator scored substantially higher than SAP’s. In other strengths, such as sales and marketing, finance and accounting, manufacturing engineering, and procure to pay, Oracle’s margin was not as wide as SAP’s. Panorama clients also said they like Oracle’s e-portal, advanced pricing, and IT architecture.

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